If the Fed buys government securities from the non-bank public, then
A) reserves at banks decrease.
B) deposits at banks increase and banks' reserves increase.
C) deposits at banks increase and banks' reserves decrease.
D) loans at banks decrease.
E) deposits at banks decrease and banks' reserves increase.
Question 2
Shoe-leather costs of inflation arise from the
A) increasing costs of apparel (clothes and shoes) as inflation rises.
B) decline in the use of money as a unit of account.
C) increase of velocity as inflation rises.
D) confusion that results from higher inflation.
E) increasing costs of agricultural products as inflation rises.
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